ABSTRACT
This chapter discusses the nature of a service, and explores the implications for the notion of an integrated world market in services. It also discusses the prospects of achieving such a world market within the foreseeable future, and the impact on such prospects of the Uruguay Round discussions on bringing services into the general agreement on tariffs and tra. Tariffs may be compatible with a weakly integrated world market, insofar as an unchanging tariff permits the impact of events in the world at large - a reduction in the costs of production. If the price of a good is higher in one market than in another, shipments of the good will be diverted from the low-price market to the high-price market. Before discussing political issues it is useful to enquire whether it is always true that the integration of any national market for a service into the world market for that service requires freedom of service suppliers to locate in the national market.
